Would appreciate any ideas about how to reduce draw downs in a long short strategy. Clearly stop losses aren't the best idea in todays world. Quantopian doesn't have options data so that is out. Any ideas or things people use that have worked for them and wouldn't mind sharing would be greatly appreciated.
My Regards,
Colin
i looked at my signals during periods of drawdown and tried to isolate a pattern in them that wasn't present in periods of gains, and had the strategy take a cash position when those sets of signals matched the drawdown pattern.
if you have only one signal then that probably won't work. get more signals if needed
Right that definitely seems like a worthy thing for me to do. But it seems like i could also just use options as a hedge on both sides to limit draw downs although it would reduce overall profit. Thanks for sharing James
The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.
In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.
